I was asked on Twitter last week to comment on the big move in MannKind (MNKD) shares recently, ahead of the expected FDA approval decision for Afrezza on July 15. The tweet below was my reply but I want to elaborate a bit more. Using Arena Pharmaceuticals (ARNA) (a very similar, retail-driven cult stock) as a precedent, MannKind should go even higher as we get closer to July 15, but if/when Afrezza is approved, the sell off begins.

. @ECantoni It should surprise no one $MNKD runs up big into Afrezza approval decision. And if it launches w/ no partner? Timber!!!

MannKind (Afrezza, insulin, diabetes) and Arena (Belviq, obesity) are very similar companies. Each pulls a significant following from retail investors who are 1) rabid and devoted to their beloved companies; and 2) fervent believers in the multi-billion dollar revenue potential for their products. It's fair to describe both MannKind and Arena as battleground stocks for bulls and bears -- each has (or has had) a significant short position. And both companies have survived past FDA rejections and managed to win at subsequent FDA advisory panel meetings.

Given the similarities, I thought we could learn something about MannKind's current stock behavior by looking back at what happened to Arena when Belviq was making its way through the FDA approval process.

The chart below tracks Arena's stock price in May and June 2012. For those who might not remember, Belviq was reviewed by an FDA advisory panel on May 10, 2012. The experts on the panel voted to recommend the drug's approval for treating weight loss. As you can see, the positive FDA panel vote had a big impact on the value of Arena's stock.

Here are some specific numbers: From May 10 (the day of the Belviq panel) to the close of trading on May 11, Arena's stock price rose 74% (from $3.66 per share to $6.36 per share.) This 74% jump in Arena's stock price is represented by the almost-vertical spike on the left of the chart.

After that initial bump, Arena's stock price continued higher heading into the FDA approval decision for Belviq on June 27, 2012. From May 11, 2012 to June 27, 2012, Arena's stock price rose another 80%, closing at $11.39 per share. On the night Arena executives and shareholders were celebrating Belviq's approval, the company sported an enterprise value of just over $2.25 billion.

If MannKind and Arena are similar, trading in the two stocks around their respective FDA advisory panels and approval decisions should also be similar. And so they are!

The chart below tracks MannKind shares this past March and April. The Afrezza FDA advisory panel was held on April 1.

On April 1, MannKind's stock price was $4.02 per share. The FDA panel vote was positive, causing MannKind shares to close at $6.99 on April 2. That's a 74% increase in MannKind's stock price -- the exact same percentage increase as was seen with Arena following the Belviq panel.

If the same trading behavior seen with Arena holds for MannKind, the stock has more room to run into the Afrezza July 15 approval decision date. So far, that's exactly what MannKind shares have done. As you can see in the chart below, MannKind's current stock price has risen another 50% since April 2. If MannKind continues to mimic Arena (80% bump between panel and approval date), you could see MannKind shares reach $12 or $13 by July 15.

That's the good news for MannKind shareholders and speculative traders. However, if the Arena analogy holds, the Afrezza post-approval honeymoon will be brief.

Remember above when I told you Arena's stock price reached $11.39 on the day Belviq was approved. Well, here's the Arena chart in the two years since. Not pretty. Arena has lost 45% of its value since the day Belviq was approved, mainly because the commercial launch has been a major disappointment. The billions of dollars in sales Arena bulls expected have not materialized, and will likely never materialize.

This is the point of the story where MannKind bulls will argue ferociously that their beloved stock is different from Arena and will not suffer the same post-approval slide. In some respects, they're right. Arena and MannKind are somewhat different, post the approval of their respective products. Unfortunately for MannKind bulls, Arena was actually in a stronger position.

When Belviq was approved, Arena had a Big Pharma marketing partner in place. So far, MannKind is alone. Arena's balance sheet and cash position were strong. MannKind's current balance is racked with debt and the company's cash is running low.

Belviq was approved with a clean, relatively unrestricted FDA label. Based on the comments from experts on the April 1 advisory panel, I won't be surprised to see FDA slaps significant restrictions on Mannkind's Afrezza label. Arena shares have suffered since Belviq's approval because the efficacy of the weight loss drug is mediocre, at best. MannKind faces similar problems with Afrezza's clinical profile.

MannKind's current enterprise value is approaching $4 billion and may reach $5 billion as July 15 approaches. When Belviq was approved, Arena's enterprise value was "just" $2.25 billion.

I can't show you a chart of MannKind's stock price after July 15, but if history is a guide, look out below.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;
click here to send him an email.